OUT OF THE FRYING PAN - If you watched any one of the recent Los Angeles mayoral debates, you likely concluded that the biggest issue in this election is who voters can trust to get the city’s fiscal house in order.
But what does it really mean to be a good fiscal watchdog in the city of Los Angeles? As a long-time city commissioner and community leader, I have found that the biggest demonstration of strong leadership is the willingness to stand up to the powerful corporate interests and their lobbyists, who continue to dominate most of the decisions made at City Hall.
In 2012, “clients” spent more than $35 million on lobbyists hired to influence City Hall decision-makers. For-profit corporations accounted for more than $31 million of that. Unions spent less than $700,000 on paid lobbyists. The list of companies paying lobbyists to represent their interests at City Hall is a Who’s Who of corporate America. Walmart, AT&T, CBS Outdoor, Coca Cola Bottling Co., BNSF Railway Co., Anthem Blue Cross, Motorola and NBC Universal each spent at least $50,000 on lobbyists to influence City Hall in 2012. The list goes on and on.
Why would so many companies spend so much money on lobbying City Hall? Because concession agreements, franchise opportunities, development funding and development rights are the lifeblood of the private sector in our city. They are worth billions of dollars to those companies and hundreds of millions of dollars to the city itself and to the taxpayers.
But how does that investment in paid lobbyists affect the city budget? Some examples are useful here. In 2012, a special City Commission estimated that Los Angeles was losing between $20 million and $30 million per year in revenue from parking companies that failed to collect and/or submit city parking tax receipts.
That commission recommended both legislation and tough enforcement action to fix the problem. The LA Parking Association, which represents the big parking companies, sprang into action and spent $33,000 on paid lobbyists. The City Council has yet to act to fix this problem.
Then there are the millions of dollars the city gives away each year to private companies to help with economic development projects. While we need good economic development in the city, we also need city leaders who drive a hard bargain and get the best possible return on our public investment in private development projects. And this has not always been the case.
For example, in 2008, Fresh & Easy Neighborhood Markets — owned by the British supermarket giant, Tesco — proposed to build an 18,000-square-foot store in South Los Angeles in exchange for a $2.5 million grant from the city. Fresh & Easy paid $100,000 to a powerful lobbying firm to make their case for this subsidy. Because of intense pressure from this lobbying firm, the final deal required nothing else from the company other than the opening of a small market in an area that needed one.
The city did not require that the jobs pay a living wage, that local residents be given preference for those jobs or even that healthy food be sold there.
Pension costs for city employees are a significant expense, but they are just one piece of the puzzle. To really be effective, our mayor and City Council need to maximize the resources coming to us from private businesses. They also need to ensure that we are negotiating strong contracts and getting the most for our public investment in the private sector. Given the pressures from powerful companies and paid lobbyists vying for private contracts and franchise opportunities, this type of fiscal watchdog work requires courage and determination. Let’s hope that the next mayor and City Council are able to rise to this challenge.
(Madeline Janis is co-founder of the Los Angeles Alliance for a New Economy and serves as its National Policy Director. She led the LA living wage campaign in the 1990s and from 2002 until 2012, she was a member of the board of commissioners of the Los Angeles Community Redevelopment Agency. This column was posted previously at fryingpannews.org and dailynews.com) [[hotlink]]
Vol 11 Issue 20
Pub: Mar 8, 2013